Reeling under the second wave of the pandemic, the country unexpectedly encountered the new social fungi drilling a black hole in the society and the economy. Hoarding and black marketing have emerged as a novel social fungus competing with the COVID – 19 virus, going ahead in the race of despicability. When the country was facing institutional lack of medical supplies, some people found peace in extending a helping hand, while others saw it as a breeding ground to profit from the helplessness of the society.
In common parlance, ‘Black marketing’, is an economic activity that occurs outside of Government – sanctioned channels, in a clandestine market, in non – compliance of the set rules. ‘Hoarding’ is the purchase of any commodity in large quantities with an intention to resell it at inflated prices, creating an artificial scarcity in the market with creates an effect of monopoly being exercised by the hoarder who sells the commodity at higher prices. Hoarding and black marketing being interconnected and intertwined to each other are means to maximize profits using unfair and unauthorised commercial routes.
In the past few weeks, people have witnessed reports of multiple incidences of oxygen cylinders, concentrators and essential drugs being hoarded, sold for exorbitant places. A pertinent question to be raised as a result of the current state of affairs in the country is why are we not able to curb the malpractices of hoarding and black marketing. In this regard, it becomes relevant to analyse the regime in place to deal with the rise of hoarding and black marketing of medical essentials.
WHAT LEGISLATIVE REGIME DO WE HAVE TO CURB THESE MALPRACTICES?
Black marketing or hoarding have not been defined under Indian law. They have to be understood from a composite reading of various statutes, rules and regulations. The Essential Commodity Act, 1955(“ECA”) gives power to the Central Government to control the production, supply and distribution of commodities that it enlists as essential commodity from time to time, through which price control can be exercised on them, non-compliance of which leads to imprisonment.
In exercise of powers under the ECA, the Drugs (Price Control) Orders, 2013(“DPCO, 2013”) was notified by the Central Government which lays down maximum retail price at which the drug shall be sold to the ultimate consumer. The National Pharmaceuticals Pricing Authority(“NPPA”), under the Ministry of Chemicals and Fertilizers, Government of India, has been designated as the authority under the DPCO, 2013 to enforce the provisions of the aforesaid Order, regulate the pricing of drugs and ensure availability and accessibility of medicines at affordable prices. Therefore, selling of any drug in excess of the MRP is contravention of the DPCO, 2013 is punishable under the ECA. In addition to this, the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 can also be enforced to curb black marketing.
The Central Government had notified that with effect from April 1, 2020, all medical devices used for the diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder, for the investigation, replacement or modification or support of the anatomy or of a physiological process, supporting or sustaining life shall be covered under the definition of “drugs” under the Drugs and Cosmetics Act, 1940 and would be governed by the provisions of the DPCO, 2013, thereby bringing within its ambit oxygen concentrators and cylinders.
The classification of COVID-19 as an “epidemic disease” under the Epidemic Diseases Act, 1897, allows for punishment under the IPC for disobedience to orders promulgated by public servants. Further, these malpractices also attract offences of cheating, dishonestly inducing delivery of property and criminal conspiracy under the provisions of the IPC.
Despite so many overlapping statutory provisions, in addition to the penal provisions of IPC, these laws have failed to act as a deterrent to curb these malpractices thereby calling for significant amendments in these laws to evolve with the changing times and trends and devise a stricter mechanism to tackle a pandemic.
HOW HAS JUDICIARY ESSAYED ITS ROLE DURING THE PANDEMIC?
In these desperate times of frenzy, the Judiciary all over the country has risen to the occasion providing a ray of hope to the citizens. Courts all over the country, well within their powers, have intervened and taken cognizance of issues of hoarding and black marketing through a catena of orders.
The Delhi High Court acknowledged that shortage of supplies could be attributed to pilferage taking place in the hospitals’ pharmacies by the medical staff. In order to avoid such practices, the Court suggested issuing permits to hospitals on the basis of their opening stock and doses administered daily, in proportion to which the replenishment would take place to keep a check on the hoarding of the medical supplies. The Delhi High Court on April 27, 2021 gave specific directions and held that stocks and sale of covid essential drugs should be recorded and subjected to random audit checks to check black market.
With the regular seizures of the hoarded and blackmarketed medical drugs and equipment, the Delhi High Court vide its order dated April 29, 2021 had directed the concerned District Commissioners to release the seized medicinal drugs and oxygen cylinders immediately to the hospitals without waiting for further orders so that they do not lose their efficacy and become non-usable. The Madhya Pradesh High Court has also directed the Government to distribute seized Remdesivir to the hospitals.
The Hon’ble Supreme Court in its suo moto order of April 30, 2021, highlighted the selling of several critical drugs, used for COVID-19, at inflated prices or in fake form and directed the Central Government to clamp down on this practice.
The Delhi High Court, on May 02, 2021, directed the state government that none of the equipment, or medicines used in the treatment of COVID-19 disease to be sold above the MRP and held that any person, who is found to be indulged in such activities shall have independent contempt action initiated against him. The Jharkhand High Court has also taken suo moto cognizance of the black marketing of Remdesivir and Favipiravir and directed the state Government to control the black marketing of life saving drugs.
Thus, with the much-appreciated intervention of the Courts across the country, State police and administrative actions to curb hoarding and black marketing were propelled leading to numerous searches and seizures by the police.
WHAT ACTIONS ARE BEING TAKEN TO CONTROL THESE MALPRACTICES?
Police all over the country have ramped up their search and seizure operations to seize oxygen concentrators and other essentials, registering FIRs under the Indian Penal Code, 1860, the Epidemic Diseases Act, 1897, and the Essential Commodities Act, 1955 to prevent and deter people from indulging in such malpractices.
The NPPA has been issuing various notifications from time to time for fixing the retail prices of formulations used in drugs under the Drugs Prices Control Order.
The NPPA vide notification dated June 29, 2020 called for the MRP of Pulse Oximeter, Oxygen Concentrator and laid that the MRP of the medical devices cannot be increased more than 10% in a year. To further monitor the prices of these medical devices, vide notification dated May 15, 2021, the importers/ manufactures were directed to submit the MRP details by May 22, 2021 and comply with the 10% increase rule, failing which action may be initiated for violation of DPCO, 2013 read with ECA.
The Central Drug Standards Control Authority on April 10, 2021 directed all the State/ UT Governments to keep strict vigil especially at sensitive places, to take stringent action against hoarding, black marketing and overcharging for Remdesivir by conducting special drive of monitoring and investigation to prevent any such incidence. The NPPA on April 17, 2021 revised the price for Remdesivir to be below Rs. 3500 per vial.
Additionally, the Drugs Control Department vide its circulation dated May 7, 2021 directed all the retailers, whole sellers, distributors not to sell over and above the notified price, MRP and also to refrain from dealing in non – permitted, unauthorised manner and not indulge in their black marketing.
The Ministry of Chemicals and Fertilisers, Government of India vide its press release dated May 19, 2021 has assured that the Government is monitoring supply of each COVID -19 essential drug by ramping up home production and increasing imports. The availability of these drugs is being monitored by implementing the three-pronged strategy of Supply Chain Management, Demand Side Management and Affordability.
For the equitable distribution and to keep a check, the Government has requested States to put in place a mechanism for its supplies amongst Government and Private Hospitals and health – care agencies, to publicise in the State the ‘Point of Contact’ for Private and Government Hospitals to obtain the drug for this allocation. Further, the Drug and Pricing Authority have been tasked with coordination with manufacturers to enhance production, get data about current stock, current capacities, projected production and allocation charts based on the production capacity and number of patients has also been prepared state wise to keep the demand – supply in control.
WHAT CHALLENGES STILL REMAIN TO BE CONQUERED?
While the country started reporting a decline in the number of cases, positivity rate and mortality rate, another challenge in the form of Mucormycosis or Black Fungus has hit the country. The Black Fungus has already been declared as an epidemic disease in various states. We are hopeful that we as citizens do not meet with the same fate of the second wave in the times to come.
What is of utmost significance in containing the COVID – 19 pandemic is the execution and implementation of the above directions in reality. Although guidelines have been issued by the Courts and Government to regulate the production, supply, allocation, prices and enforcement agencies have been directed by the Drug Controller General of India to take immediate action on incidence of black marketing, hoarding and overpricing yet the harsh truth and grim reality is not hidden from anyone.
While hospitals were facing dire shortage of medical supplies, India also saw a growing number of politicians and celebrities distributing the same to the general public. Instances such as these do raise pertinent questions as to how they managed to get hold of the same when hospitals themselves were running short on these essential supplies. The Bombay High Court recently raised questions from State as to how these celebrities were able to procure COVID related drugs. In another case, the Delhi High Court, whilst noting that the intentions were good, held that politicians cannot hoard medical supplies and the same should be surrendered to the Directorate General of Health Services while urging the Delhi Police to stand up to the occasion.
WHERE ARE WE HEADING?
The second wave of the pandemic has been riddled with difficulties; firstly, the abysmal shortage of supply of medical essentials; and secondly, the parallel black market of these commodities. While the former paved the way for the genesis of the latter; black markets have acted as a death knell to an already debilitating healthcare system.
With the advent of these social fungi, if such issues are not dealt with utmost priority in the second wave itself, there is a chance of them spilling over in the third wave. This will not only be a burdensome situation for the government but also a troublesome situation for the public at large.
At this time of distress, every individual needs to introspect that where is the collective conscience of the society heading to. The time has come to ponder about this and find answers before the imminent, dreaded third wave hits us and fight back collectively as a country to emerge victorious as humans, above all other acquired titles.
We collectively fail and we collectively rise!
Assisted by Snehil Singh and Vatsala Parashar
The second wave of the pandemic has been riddled with difficulties; first, the abysmal shortage of supply of medical essentials; and second, the parallel black market of these commodities. While the former paved the way for the genesis of the latter; black markets have acted as a death knell to an already debilitating healthcare system. With the advent of these social fungi, if such issues are not dealt with utmost priority in the second wave itself, there is a chance of them spilling over in the third wave. This will not only be a burdensome situation for the government but also a troublesome situation for the public at large.